7449 Jeffery Ln S

Cottage Grove, MN 55016

$367,500D-

4 bd · 2.0 ba · 1,766 sqft · Built 1981 · SingleFamily · Pending · 23 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $2,750/mo
• Mortgage (P&I): −$1,927
• Tax + insurance: −$505
• HOA: −$0
• Vac / Maint / Mgmt: −$577
• Net cashflow: $-260/mo
• Annual: $-3,124/yr
• Cap rate: 5.44%
• Cash-on-cash: -3.04%
• DSCR: 0.86
• 1% rule: 0.75%
• Cash to close: $102,900

Investor read

• This is a 4-bed/2.0-bath single-family listed at $368k.
• At list price, monthly cash flow is $-260 ($-3k/yr) — negative.
• To cash-flow at today's rent, offer at most $322k (12.5% below list).
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $275k (25.2% below list).
• It's been on market 23 days — a 2% lower offer ($362k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $275k (25.2% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $3k of loan paydown is wiped out by about $11k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#132 in MN, #2,948 nationally) — a middle-class / working-renter tenant base. Strengths: crime A+, employment A+, housing A+; Watch: cost of living C-, amenities F, commute F.
• South Washington County School District (suburban): math 52% / reading 61% proficiency, ranked #40 of 301 in MN (top 13%) — acceptable for families but not a draw, mixed tenant base, ~2y average lease; only 14% free/reduced lunch — higher-income household profile.
• Zoned schools: Grey Cloud Elementary (math 57% / reading 63%, grade B-, #209 of 857 statewide, top 25%, 763 students, 18% FRL); Cottage Grove Middle School (math 33% / reading 51%, grade D-, #131 of 258 statewide, top 53%, 924 students, 33% FRL); Park High School (math 39% / reading 63%, grade D+, #127 of 471 statewide, top 27%, 1,938 students, 33% FRL).
• Market conditions: Rents rising (+3.8%/yr); 401 active listings in the ZIP; 4 comparable units currently listed for rent nearby; rentals at typical pace (median 26d on market — plan ~3-4 weeks tenant-placement turnaround); high-income renter base; 1,405 units permitted in Washington County in 2024 (121 in 5+ unit buildings).
• Washington County population projected at +16% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• 5 sale attempts since 4y ago with the ask held roughly flat each time — persistent listings suggest the price (not the market) is what's stuck; bring a comps-based counter.
• Cap rate 5.4% vs local median 3.4% in Cottage Grove — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• What do current leases actually rent for vs. the listed asking? Can we see a recent rent roll and the last 12 months of T-12 income?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Schools are B-rated — typically a magnet for longer-tenancy family renters. What's the average tenant stay here, and is there a school-zone premium baked into asking?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.